Missouri’s corporate income tax rate of 6.25 percent, was bested only by South Dakota and Wyoming, which tied at No. 1 for having no corporate tax rates.
Because Missouri allows 50% of federal income tax payments to be deducted before computing taxable income, leading to an effective rate of 5.2%, it performs better in the corporate tax index rankings than states with lower rates, such as Arizona, Florida, Georgia, Michigan, Oklahoma, Tennessee, and Virginia. Corporate income tax rate is one of the most important factors for companies evaluating locations for business expansion according to Area Development Magazine’s annual survey of corporate site consultants.
Missouri’s overall ranking (17th) remains unchanged for the 2016 index. The state also ranked in the top 15 for property tax index and unemployment insurance tax index.
The annual index measures the structure of each state’s tax code based on more than 100 variables in the five tax categories of corporate, individual income, sales, property and unemployment insurance. Read more about it at taxfoundation.org.